Question
Question 13: Practice HM Corp. has a debtequity ratio of .85. The company is considering a new plant that will cost $145 million to build.
Question 13: Practice
HM Corp. has a debtequity ratio of .85. The company is considering a new plant that will cost $145 million to build. The flotation cost on new equity is 8 percent. The flotation cost on new debt is 3.5 percent. What is the initial cost of the plant if it typically uses 40 percent retained earnings? Answer: $151,356,993.7
Please show work with no excel! Thank you :)
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Investment Analysis And Portfolio Management
Authors: Frank K. Reilly, Peggy L. Hedges, Philip Chang, Keith C. Brown, Hedges Reilly Brown
1st Canadian Edition
0176500693, 978-0176500696
